Crypto Biz: Binance’s chaotic June, miners gear up for halving, Bitfinex’s Latam expansion

June 30, 2023 Coin Telegraph

Australia

This week’s Crypto Biz looks at the story behind Binance’s debanking in Australia, Bitcoin miners preparing for the next halving, and Bitfinex’s expansion in Latin America.

June was a tough month for Binance, as it faced stress tests worldwide after the United States Securities and Exchange Commission (SEC) filed a lawsuit against the crypto exchange and its leadership.

In a nutshell, over the past 30 days, the Belgian financial regulator ordered Binance to cease all crypto services, the exchange failed to obtain a license in the Netherlands, Binance’s Brazil head has been subpoenaed to appear before Congress concerning a Ponzi scheme investigation, and just a few days ago, another ongoing investigation in France became public.

And there’s more: Binance’s United Kingdom-based subsidiary canceled its registration with the Financial Conduct Authority, and in the U.S., the exchange still has a long road ahead in its struggle with regulators. Moreover, the exchange was denied a crypto custody license in Germany and lost its euro banking partner.

Yet, despite all these developments, Binance remains untouched as the top dog among centralized exchanges, with $58.11 billion in total value locked, down from $63.8 billion on June 1, according to data from DefiLlama. The exchange’s next big focus is in the United Arab Emirates, an allegedly “prime destination” for crypto businesses seeking a clear path forward.

“We keep building,” Binance CEO Changpeng Zhao said in a tweet on June 28, following a long and hectic month.

This week’s Crypto Biz looks at the story behind Binance’s debanking in Australia, Bitcoin (BTC) miners preparing for the next halving, MicroStrategy’s latest Bitcoin purchase and Bitfinex’s expansion in Latin America.

Binance Australia got 12 hours’ notice before it was debanked, exec says

There was no prior warning, consultation or redress. In the middle of the night, Binance Australia’s team was suddenly told it would be “cut off” from the country’s banking system. Binance regional manager Ben Rose shared details of the exchange’s debanking in the country at the Australian Blockchain Week on June 26. In May, the company announced that its dollar services were suspended after its payments provider Zepto was told to discontinue support for Binance. According to Rose, the move impacted around 1 million Australian-based customers, with Binance now seeking an alternative payment provider.

*Ben Rose (right) on stage at the Australian Blockchain Week. Source: Cointelegraph*

Riot Platforms to add 33,000 Bitcoin miners ahead of 2024 halving

Bitcoin miner firm Riot Platforms is loading up for the next halving cycle by purchasing 33,280 “next-generation” rigs for its Texas facility, costing $162.9 million. The miners, which were sourced from MicroBT, will boost the firm’s self-mining capacity by 7.6 exahashes per second (EH/s) to 20.1 EH/s once the machines are installed in the first quarter of 2024. Among the machines, 8,320 are M56S+ models with a hash rate of 220 terahashes per second (TH/s), while the remaining 24,960 M56S++ are slightly more powerful at 230 TH/s.

MicroStrategy buys $347 million worth of Bitcoin amid market thaw

MicroStrategy announced the purchase of 12,333 Bitcoin on June 28, worth $347 million at publication. MicroStrategy now owns 152,333 BTC worth $4.52 billion, with an average purchase price of $29.668 per coin. The coins were bought between April 27 and June 27, with the purchase partly financed by the issuance of new stock. MicroStrategy has been actively purchasing Bitcoin using cash and stock financing during the crypto bear market, sometimes irrespective of price. In Q1 2023, the firm reported its first profitable quarter since 2020 due to a one-time income tax benefit.

MicroStrategy has acquired an additional 12,333 BTC for ~$347.0 million at an average price of $28,136 per #bitcoin. As of 6/27/23 @MicroStrategy hodls 152,333 $BTC acquired for ~$4.52 billion at an average price of $29,668 per bitcoin. $MSTR https://t.co/joHo1gEnR0
— Michael Saylor⚡️ (@saylor) June 28, 2023

Bitfinex launches P2P trading platform in Venezuela, Argentina and Colombia

Digital asset exchange Bitfinex is expanding its operations to Latin America. The crypto company has launched a peer-to-peer trading platform in Venezuela, Argentina and Colombia, allowing users in the South American nations to buy and sell Bitcoin, Ether (ETH), Tether (USDT), Tether’s euro-pegged stablecoin, Tether EURt (EURT), and Tether Gold (XAUT). In April, Bitfinex’s El Salvador arm received a digital asset service provider license from the National Digital Asset Commission. Last month, the exchange partnered with Chile-based crypto platform OrionX to support local education and financial literacy programs.

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Paxos and MercadoLibre partner up to bring USDP to Mexico

June 28, 2023 Coin Telegraph

Coin Telegraph

The move provides PAX coin access to Mexico’s 3.1 million-plus cryptocurrency users.

Blockchain fintech company Paxos and online marketplace MercadoLibre have entered a partnership to bring the Pax Dollar (USDP) stablecoin to Mexico via the MercadoPago payment service on June 28.

According to a press release shared with Cointelegraph, USDP will be available to all MercadoPago customers throughout Mexico. While the company is based in the United States — with offices in New York, London and Singapore — more than 60% of its active wallets support customers throughout Latin America.

Mexico currently boasts a 9.3% penetration rate for cryptocurrency use, with more than 12 million users, per a report from Statista. By 2027, analysts estimate more than 20 million people in Mexico will hold crypto, bringing the total penetration to 14.6%.

The introduction of USDP to the MercadoPago payment ecosystem adds stablecoin access to the service’s options in Mexico, a feature that could provide much-needed relief from extraneous fees related to remittances for a significant number of users.

While Venezuela may lead the way in cryptocurrency adoption among Latin American nations, Mexico ranks highest in total number of transactions. This is largely due to the number of remittances, with only India receiving more.

Paxos is well known in fintech through its various dealings, including a partnership with PayPal, and its noteworthiness as the first blockchain company to receive approval from the U.S. Securities and Exchange Commission (SEC) to settle U.S.-listed securities.

In February 2023, however, Paxos received a Wells notice indicating that its Binance-based stablecoin, Binance USD (BUSD), would be labeled a security and, as such, should have been registered.

As Cointelegraph reported in February, the cryptocurrency community was baffled by the notice, and Paxos issued a statement vehemently disagreeing with the SEC’s notion that BUSD should be classified as a security.

In other Paxos news, recently launched cryptocurrency exchange EDX has decided to switch custody providers. The exchange will drop its current partner, Paxos, and instead tap Anchorage Digital. According to a Paxos spokesperson, EDX made the change in order to facilitate a shift toward a noncustodial offering at launch.

Latam crypto holders flock to Bitget following Binance, Coinbase suits

June 10, 2023 Coin Telegraph

Argentina

The number of Bitget users in Latin America increased by 43% from June 6 to June 9, along with a 134% increase in deposits.

Crypto exchange Bitget has seen a surge in new accounts in Latin America following lawsuits by United States regulators against major competitors Binance and Coinbase.

As compared to daily averages, new users in the region increased by 43% from June 6 to 9, with Brazil and Argentina leading market share growth, a spokesperson from Bitget told Cointelegraph.

According to the exchange, new clients in Brazil soared 54%, with a 208% jump in total deposits. In Argentina, its customer base rose by 33%, while funds deposited expanded 87%. The crypto exchange also operates in Venezuela, Colombia, and Mexico. Over the last few days, Bitget's total deposits rose 134% in the region.

Bitget has over 8 million clients across 100 countries. The company did not disclose the total number of users in Latin America.

The figures are explained by recent developments in the United States. On June 5, crypto exchange Binance was sued by the U.S. Securities and Exchange Commission for 13 charges, including alleged sale and offer of securities, failure to register as an exchange or broker, and commingling of funds.

According to data from DefiLlama, Binance net outflows in the past seven days sits at $3.128 billion as of writing, while Bitget has seen its deposits increase by $14.8 million. The largest inflow of funds was reported by crypto exchange OKX, which received $603 million in deposits over the past week.

*CEX Transparency dashboard. Source: DefiLlama*

"The crypto industry is still very new and has experienced tremendous growth in recent years. [..] favorable policies are being implemented in places like Hong Kong, Dubai, Singapore and new opportunities are emerging. So, we are convinced that things will settle down over time, with the industry consolidating itself among the strongest ones in the modern economy," told Cointelegraph Gracy Chen, managing director of Bitget.

Also targeted by U.S. regulators, Coinbase was sued on June 6 for allegedly offering unregistered securities and operating as an unregistered security broker since 2019. SEC's Chair Gary Gensler accused the crypto exchange of depriving customers of critical protections that prevent fraud and manipulation, along with not providing proper safeguards against conflicts of interest. In the last 24 hours, Coinbase's trade volume has changed by 113.06% to $1.5 billion.

Binance has previously ranked Brazil among its top global markets, and its local partner was recently granted a payment provider license in the country. Coinbase is also expanding its local operations. Since March, it has partnered with local payment providers to offer crypto purchases, and enable deposits and withdrawals in the local currency.

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Brazil’s crypto exchange Mercado Bitcoin licensed as payment provider: Report

June 3, 2023 Coin Telegraph

Brazil

As a payment institution, the new fintech MB Pay will enable certain digital banking services to the crypto exchange's users in the country.

Cryptocurrency exchange Mercado Bitcoin was granted a payment provider license from Brazil's central bank on June 2, according to local media reports. With the license, the company will launch its fintech solution MB Pay.

"The approval of the Central Bank is a crucial step, as it allows us to continue expanding our business and providing a better service to our customers," said Roberto Dagnoni, CEO of 2TM, the parent company of Mercado Bitcoin.

As a payment institution, MB Pay can provide Brazilian users with certain digital banking services using crypto assets held on the exchange, such as investing in digital fixed income, staking, and other financial transactions. A debit card offering a crypto off-ramp for users is expected to go live soon.

Earlier this week, traditional local broker Guide Investimentos also announced a partnership with Mercado Bitcoin to enter the digital asset market.

Mercado Bitcoin's fintech rollout had been planned for 2021, but was delayed due to the regulator's approval process. The development came on the same day as Mercado Bitcoin was ordered to return over 2,182 BTC (~$59.3 million as of writing) back to a group of investors alleging that a co-founder and former executive had withheld funds in a fabricated hack in 2013.

A vibrant demand for digital solutions and a population of nearly 214 million have drawn crypto firms to the Latin America country. Binance has previously ranked Brazil among its top global markets. Its local partner, Latam Gateway, was also granted a payment provider license in the country on May 19.

Other crypto exchanges licensed as payment providers in Brazil include Crypto.com and Bitso.

Coinbase is also expanding operations in the country. Since March, the American exchange has partnered with local payment providers to offer crypto purchases, as well as enable deposits and withdrawals in the local currency.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Visa, Microsoft and others join Brazilian CBDC pilot

May 26, 2023 Coin Telegraph

Brazil

Both national and global companies will participate in the upcoming pilot project of the Brazilian central bank digital currency.

Both national and global companies will participate in the upcoming Brazilian central bank digital currency (CBDC) pilot project. Banco Central do Brasil, the country’s central bank, will begin adding participants to the digital real platform around the middle of June 2023.

On May 24, the central bank published the final list of CBDC pilot participants. Participants were chosen from a pool of 36 bids made by single companies and consortia, “totaling more than 100 institutions”. The final number of participants is 14; however, some represent groups of companies. For example, the United States-based tech giant, Microsoft; Brazil-based bank, Banco Inter; and the digital technology company, 7COMm, comprise one of the 14 participants.

Among other participants are Visa, Santander, and several Brazilian banking institutions, such as Itaú Unibanco, BTG Pactual and Banco Bradesco.

In the current phase of the digital real pilot, the central bank will test the privacy and programmability functionalities of its platform through a single use case: a delivery versus payment protocol for federal public securities.

The Brazilian CBDC pilot was officially announced in 2022. The value of digital real would be pegged against the national fiat currency, the real. It would have a fixed supply and be minted over time.

With a population of 214 million, the largest country in Latin America remains a location of attraction for global crypto companies. In January, Binance and Mastercard teamed up to launch a prepaid crypto card in the country. Since March, Coinbase has partnered with local payment providers to offer crypto purchases, and enable deposits and withdrawals in the local currency. On May 19, the central bank granted Latam Gateway — the payment provider for Binance in Brazil — a license to operate as a payment institution and electronic money issuer.

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Bitfinex partnership pushes crypto adoption in Latin America

May 24, 2023 Coin Telegraph

bitfinex

Bitfinex announced a new investment in the Chile-based crypto exchange in an effort to boost crypto adoption in Latin America.

The digital asset platform Bitfinex announced a new partnership with a local exchange in Latin America, as a part of a larger effort to push for wider adoption in the region.

On May 24, Bitfinex revealed a new investment in one of Chile’s leading cryptocurrency exchanges OrionX. According to the announcement, the partnership between the two digital asset companies aims to support local education programs, along with financial freedom and inclusion efforts.

This comes just over a month after Bitfinex Securities El Salvador was granted an operating license in El Salvador by the National Digital Asset Commission to issue and trade secondary assets via a platform compliant with local regulations.

The exchange also recently sponsored a three-week boot camp in Paraguay for women to learn basic coding skills.

Latin America has been a growing market in the crypto scene over the last year, and continues to attract attention from outside investors.

According to the Chainalysis Global Adoption Index for 2022, Latin America constituted 9.1% of the global crypto value received in 2022. The region came in 7th for the largest cryptocurrency market.

The same Chainalysis report also highlighted that Latin America is home to five of the top thirty countries in the index which includes Brazil (7), Argentina (13), Colombia (15), Ecuador (18), and Mexico (28).

Back in March, Coinbase announced service expansion in Brazil via partnerships with local services, including round-the-clock customer support in Portuguese and easier onboarding processes.

Last month in Argentina, the local securities regulator approved a Bitcoin futures index, which is reportedly a first in Latin America.

Also in Argentina, a new partnership on May 19 between the stablecoin issuer Tether and on- and off-ramp platform KriptonMarket will allow support for USDT transactions at Argentina’s Central Market.

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Binance provider in Brazil gets payment institution approval

May 20, 2023 Coin Telegraph

Binance

Binance's partner Latam Gateway has been granted a license to operate as a payment institution and electronic money issuer in Brazil.

Latam Gateway, the payment provider for Binance in Brazil, has been granted a license by the country's central bank to operate as a payment institution and electronic money issuer on May 19, according to local media reports.

Brazil is among Binance's top global markets, the exchange said in a previous announcement.

Latam Gateway helps foreign companies to operate in Brazil by providing on/off ramps with the Brazilian real. According to the company's website, Binance is the only crypto client in the country. Other relevant clients include gaming-related companies such as Codashop, Moedaz and Game Hollywood.

Binance and Latam Gateway have been partners since June 2022, following the termination of Binance-Capitual's collaboration in the country.

A market with nearly 214 million people has attracted crypto companies to Brazil. In January, Binance and Mastercard teamed up to launch a prepaid crypto card in the country, allowing residents to make purchases and pay bills with over 14 crypto assets through real-time crypto-fiat conversion. Cardholders are required to comply with Know Your Customer (KYC) standards.

Also expanding operations in the country is Coinbase. Since March, the exchange has partnered with local payment providers to offer crypto purchases, as well as enable deposits and withdrawals in the local currency. Coinbase has been in the country since 2021, when it established a tech hub to offer crypto services to Brazilians.

Brazil's regulatory authorities are also paying attention to crypto firms. Binance is reportedly being investigated for allegedly helping clients evade a stop order on cryptocurrency derivatives investments.

In 2020, the Brazilian Securities and Exchange Commission issued a stop order on crypto derivatives. Futures contracts are considered securities under local law, regardless of the nature of the underlying assets.

According to documents from the local probe, Binance's platform displayed instructions for Brazilian users to change their language settings in order to access the Binance's Futures section. Additionally, the SEC said there was extensive Portuguese-language content available without a restriction notice for Brazilian users. Canadian and American securities regulators have conducted similar investigations against the crypto exchange.

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Tether, KriptonMarket to support USDT transactions at Argentina’s Central Market

May 19, 2023 Coin Telegraph

Argentina

The Central Market supplies over 12 million people per month in Argentina. The move will allow companies to accept and pay bills with USDT.

Argentinians can now purchase dairy produce with the USDT stablecoin at the Central Market of Buenos Aires — one of the largest movers of fruits and vegetables in Latin America. The move was enabled by a partnership between the stablecoin issuer Tether and on-/off-ramp platform KriptonMarket.

The collaboration will provide companies the ability to accept and pay bills with USDT, as well as pay a percentage of employee salaries with the stablecoin. The Central Market supplies over 12 million people per month and is home to over 500 wholesale companies, according to the city of Buenos Aires. It also employs over 2,000 people.

The partnership will also reduce intermediation costs as well as give users a payment option pegged to the United States dollar and is therefore less susceptible to market fluctuations, said Tether in a statement shared with Cointelegraph.

Crypto adoption is booming in Argentina thanks to hyperinflation and its fiat peso devaluation. April’s inflation rate rose to 108.8% year-over-year in the Latin American country, remaining at its highest level since 1991 after rising 104.3% in March. On May 15, the Argentine central bank elevated its benchmark interest rate to 97%, but tight monetary policy does not appear to be bold enough to curb price escalation.

*Argentina’s 1-year inflation rate. Source: Trading Economics, Instituto Nacional de Estadística Y Censos*

“With the continuing devaluation of their nation’s currency, the people of Argentina need solutions to pursue their own financial freedom. If we are able to contribute to the well-being of an entire country through the state-of-the-art technologies provided by the blockchain, we will be one step closer to ending the fight against financial discrimination,” said Paolo Ardoino, chief technology officer of Tether.

In a recent interview with Cointelegraph, Daniel Fogg from IOV Labs, the foundation behind smart contract platform Rootstock, said that emerging markets are leading the way in crypto adoption, as people look to cryptocurrencies as a safe haven against macroeconomic shocks. “For me, if you want to look at the future of what I hope crypto will become, it exists today in Turkey, Colombia, Nigeria, Argentina. It doesn’t exist today in the United States or the U.K.," he noted.

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Crypto adoption is booming, but not in the US or Europe — Bitcoin Builders 2023

May 18, 2023 Coin Telegraph

Coin Telegraph

At the Bitcoin Builders Conference, Daniel Fogg from IOV Labs and Rootstock spoke with Cointelegraph about how emerging markets are shaping the future of the crypto space.

Mass crypto adoption is already taking place around the world, but not in the United States or Europe, nor does it have Bitcoin as a flagship asset for mainstream acceptance. According to Daniel Fogg of smart contract platform Rootstock, the increase in adoption is instead ongoing in emerging markets, where cryptocurrencies are offering solutions to people’s everyday problems.

In an interview with Cointelegraph’s Joe Hall at the Bitcoin Builders Conference in Miami, Fogg spoke about Bitcoin pragmatism, adoption worldwide and how emerging economies are shaping the future of the crypto space.

*Joe Hall and Daniel Fogg at the Bitcoin Builders Conference 2023. Source: Cointelegraph*

According to Fogg, emerging markets are leading the way in crypto adoption for one major reason — countries that have significant macroeconomic challenges. In his view, many people’s first meaningful digital banking experience will be happening in emerging markets on crypto rails in the coming years.

“People on the streets have a pressing need to protect their income, to get access to U.S. dollars to get a loan. [...] We’re seeing these massive shifts. For me, if you want to look at the future of what I hope crypto will become, it exists today in Turkey, Colombia, Nigeria, Argentina. It doesn’t exist today in the United States or the U.K."

Fogg believes the crypto space is evolving through two major crypto use cases. One is centered around decentralized finance (DeFi) solutions for people seeking outsized returns and alternative investment opportunities. Another use case involves people acquiring stablecoins pegged to the U.S. dollar for savings and daily payments in economies dealing with inflation, devaluation and other monetary problems.

“I think there’s a kind of bifurcation in what DeFi could become, advanced DeFi, which is a lot of what I think the usage in America and Europe will be [...], and then everyday DeFi, which is what you’re going to see in emerging markets every day."

Emerging markets offer “scale opportunity” to retail finance, said Fogg, adding that developing DeFi products for these areas is a key strategy for Rootstock and its sister company, IOV Labs. Speaking about Bitcoin pragmatism, Fogg highlighted that although Bitcoin is a remarkable innovation, Bitcoin alone is simply not enough. As told by Fogg, the crypto space doesn’t yet have an established use case for billions of users, and it may take years to achieve that:

“In many cases, we think they’re paying, saving, borrowing, lending, retail finance, etc. But there are many other use cases as well. We have to experiment our way there. And if we are held back by a traditional conservative mindset around what Bitcoin could be, I think that’s to the world’s detriment."

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

Argentina’s central bank halts cryptocurrencies from payment apps

May 5, 2023 Coin Telegraph

Argentina

The ban is intended to reduce Argentina's payment system exposure to digital assets, said the monetary authority.

On May 4, Argentina's central bank has banned payment providers from offering crypto transactions, alleging it intends to reduce the country's payment system exposure to digital assets.

According to a statement from the monetary authority, payment providers may not offer or facilitate crypto services through their applications. The move brings payment fintechs and financial institutions under the same rules in the country.

"Payment service providers that offer payment accounts [...] May not carry out or facilitate operations with digital assets, including crypto assets, that are not regulated by the competent national authority and authorized by the Central Bank of the Argentine Republic," said the authority. Cryptocurrencies are not regulated in Argentina, which means all coins and tokens are subject to the decision.

It's unclear how the measure will affect the local crypto industry. Local media reported that payment providers refused to comment on the decision. Argentina's fintech chamber urged the government to reconsider the decision, claiming that "it limits access to a technology that offers multiple benefits and opportunities for our society."

Invitamos al BCRA a revisar esta medida y a trabajar en conjunto con la Cámara Argentina Fintech y otros actores relevantes del sistema para establecer un marco que permita el desarrollo responsable y sostenible de la industria cripto en Argentina.
— Cámara Argentina Fintech (@CamaraFintechAr) May 5, 2023

Hyperinflation is driving crypto adoption in Argentina. In April, the price of Bitcoin (BTC) reached a record high in the Argentine peso (ARS), with the BTC exchange rate crossing over 6.59 million ARS — up more than 100% year-to-date (YTD).

In March, inflation in the country soared by 104.3% on an annual basis, following a 102.5% jump in the previous month, data from the national statistics office show.

Bitcoin’s popularity in the country also coincides with the ongoing devaluation of the Argentine peso, Cointelegraph reported. The currency has fallen almost 50% against the United States dollar in the past year.

Performance of the ARS/USD price over the past 12 months. *Source: Google Finance.*

Amid the ongoing economic crisis, even some Argentinian cities are seeking a safe haven in cryptocurrencies. Last December, the Argentine province of San Luis allowed the issuance of its own stablecoin pegged to the U.S dollar, available to all residents and 100% collateralized with liquid financial assets.

Chainalysis found that over 30% of consumers in Argentina use stablecoins for everyday purchases, most likely for small retail transactions under $1,000.

Latin America

Binance Australia got 12 hours’ notice before it was debanked, exec says

Riot Platforms to add 33,000 Bitcoin miners ahead of 2024 halving

MicroStrategy buys $347 million worth of Bitcoin amid market thaw

Bitfinex launches P2P trading platform in Venezuela, Argentina and Colombia

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